You are looking at a one-year loan of $15,000. The interest rate is quoted as 10 percent plus 3 points. A point on a loan is simply 1 percent (one percentage point) of the loan amount. Quotes similar to this one are common with home mortgages. The interest rate quotation in this example requires the borrower to pay 3 points to the lender up front and repay the loan later with 10 percent interest.    What rate would you actually be paying here? Multiple Choice 6.70% 10.00% 13.40% 12.06% 14.74%

Q: Suppose you take out a home mortgage for $160,000 at a monthly interest rate of 0.6%. If you make…

A: Loans are defined as a type of credit vehicle through which a sum of money is lent to some other…

Q: What was the interest rate on a 3.5-year loan, $1000 loan if the simple interest paid was $297.50?

A: Interest rate = (Total interest / amount) * (1/time)

Q: You borrow $625 for 60 days at a simple interest rate of 2.9%. What is the interest on the loan? Be…

A: The Bankers’ rule is a measure of calculating simple interest where the exact number of days of the…

Q: what is the interest rate

A: Interest rate is the rate at which the bank or any other lenders charges from the borrowers for…

Q: You have just purchased a new warehouse. To finance the purchase, you've arranged for a 30-year…

A: Effective Annual Rate, or Annual Equivalent Rate (AER), is what EAR stands for. It is a financial…

Q: You are looking at a one-year loan of $13,500. The interest rate is quoted as 9.7 percent plus two…

A: Here,Loan Amount $ 13,500Interest Rate9.7%Lender Upfront Cost2%Time Period in years1Lender Upfront…

Q: You are borrowing $100,000 to purchase a house. The interest rate is 3.5% over 15 years, with…

A: Solution 1 = Monthly Payment Formula =  PMT(rate, period,-borrowing) Monthly Payment $714.883…

Q: suppose that you decide to borrow $15,000 for a new car. you can select one of the following loans,…

A: a.Loan ALoan Amount (pv) = $15,000Interest Rate (rate) = 5.9%Time Period = 3 YearsNumber of Payments…

Q: We charge $2,100 on a credit card with an annual interest rate of 18% and for which the minimum…

A: In the first scenario, interest rate is 18% and either $10 or 2.5% is paid as the minimum payment,…

Q: To payoff a loan of $1000 you need to make 40 payment of $36.56 per month. What rate of interest are…

A: Annual percentage rate refers to the interest rate paid by the borrower to the lender on a yearly…

Q: If a lender makes a simple loan of $600 for 3 years and charges 5%, then the amount that the lender…

A: An interest rate is the cost of borrowing money or the return earned on an investment or savings…

Q: You need to borrow $10,000 right now but can repay the loan in 6 months. Since you want to pay as…

A: Simple Interest Loans are the loans in which the interest amount is calculated by multiplying the…

Q: You can afford a $1400 per month mortgage payment. You've found a 30 year loan at 5.5% interest. a)…

A: Monthly payment (C) = $1400 Monthly interest rate (r) = 0.00458333333333333 (i.e. 0.055 / 12)…

Q: TOTAL INTEREST PAID. You are considering purchasing a home that requires $450,000 mortgage at 5.25%.…

A: Solution:- When an amount is borrowed, it can either be repaid as lump sum payment or in…

Q: You buy a home for $182,251 and put $13,298 down. You borrow the remainder. The mortgage company…

A: The Annual Percentage Yield (APY) is a financial metric that quantifies the annualized rate of…

Q: You are looking at a one-year loan of $20,000. The interest rate is quoted as 10 percent plus two…

A: As it is already explained in the question, 1 point is equal to 1% of the loan amount. A point is a…

Q: Complete the following table. (Note: Round your answers to the nearest dollar.) Principal Finance…

A: The annual percentage rate is a conventional way to quantify the whole cost of borrowing in…

Q: lortgage with Points. Home loans sometimes involve "points," which are es charged by the lender.…

A: Loan amount=$100000Two points are charged.Interest rate=1% per monthPeriod=360 months.

Q: can select one of the following loans, each requiring regular monthly payments:   Installment Loan…

A: To calculate the monthly payments and total interest for each loan, we can use the following formula…

Q: r wants to buy a property for $375,000 and qualified for a 80 percent loan. A fixed-rate loan is…

A:

Q: maximum loan

A: Loan amount refers to the amounts which a person borrowed at any given time under the mortgage. It…

Q: 1. Consider a home mortgage of ​$150,000 at a fixed APR of 4.5​% for 25 years.   a. Calculate the…

A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…

Q: You can afford a $1400 per month mortgage payment. You've found a 30 year loan at 7.9% interest.…

A: Present value of annuity.PV = A*wherePV = Present value of annuityA = periodic paymentsr = interest…

Q: ay you need to take out a loan for $1,500. There are two options for repayment: Option A:…

A: Amortized loans refer to equal payments containing  both principal and interest; in which, first of…

Q: You plan to borrow $25,000 at a 3.4% annual interest rate compounded annually. The terms require you…

A: In case of amortization loan, equal payments at equal interval over the loan period are made. A…

Q: Suppose that you want to take out a loan and that your local bank wants to charge you an annual real…

A: Compute the nominal interest rate: Nominal interest rate is calculated by using following formula:

Q: You are looking at a one-year loan of $20,000. The interest rate is quoted as 10 percent plus two…

A: Loans refer to contracts between two parties where one borrows a sum from the other on the promise…

Q: Suppose you borrow $29 thousand for 54 months to purchase a car. The loan has a rate of 7% with…

A: Information Provided: Loan amount = 29,000 Loan period = 54 months Interest rat e= 7% with…

Q: You are looking at a one-year loan of $13,500. The interest rate is quoted as 8.7 percent plus two…

A: Point on a loan:One point implies one percentage of the loan amount. As it is payable upfront, it…

Q: Please build an excel spreadsheet and show the formulas  to answer a. through g. using the…

A: See the answer in the explanation field.Explanation:Answer information:Step 1:a) Loan Amount = Price…

Q: A finance company uses the discount method of calculating interest. The loan principal is $5,000,…

A: Future Value = Present Value * (1+r)^n

Q: Discount loan. Up-Front Bank uses discount loans for all its customers who want one-year loans.…

A: Interest on discount rate = 8.5%  Repayment Amount = $225,000 The initial amount will be equal to…

Q: Consider a 30-year fixed-rate home loan of $565,500 with an interest rate of 4.25%. What is the…

A: Loan amount (P) = $565,500 Interest rate (r) = 4.25% Period (t) = 30  years

Q: You have just purchased a new warehouse. To finance the purchase, you' ve arranged for a 35-year…

A: The objective of this question is to calculate the Annual Percentage Rate (APR) and the Effective…

Q: Many mortgage lenders offer a way to lower your interest rate by paying some of the interest up…

A: Mortgage loans are paid by equal monthly installments and these monthly installments carry the…

Q: Suppose your gross monthly income is $5,300 and your current monthly payments are $575. If the bank…

A: Present value is the estimation of the current value of future cash value which is likely to be…

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.